Eurozone with an inflation

Inflation in the eurozone has appeared. According to the latest data, inflation in euro countries, for the first time in more than a year, is above the ECB's target. At the same time, the main consumer price index is still growing at a slow pace.
Inflation in the euro area amounted to 2% yoy, against a background of 1.9% last month. Without taking into account volatile food and fuel prices, inflation in the euro area is 1%. This is a slowdown in last month growth, when the rise in the core CPI was 1.1%.
High oil prices are expected to continue to exert upward pressure on growth in euro area goods and services prices.
At the same time, the key consumer price index is expected to grow at an accelerated pace in the second half of the year.
Against the background of widespread wage increases in the euro area, investors and analysts do not expect any major surprises in the upward direction.
The euro initially rose against the dollar after data, adding 0.1% to its value to 1.1656 dollars. Subsequently, however, the single currency returned some of the earned, returning to levels below 1.1650.

Fed kept interest rates unchanged

The Fed kept the interest rate unchanged yesterday, but signaled that the inflation target was reached. Thus, the reserve, though disappointing investors expected an increase in interest rates at this meeting, opened its way to a June increase in interest rates.
The dollar initially declined, but subsequently recovered its losses. The euro returned at trading levels below 1.2000, with the pound continuing with its exceptionally strong impairment. Early this morning, a pound is exchanged for 1.3595 dollars.
The renewal of the Fed's inflation target is a major step after nearly six years in which consumer price growth in the world's largest economy is below the target of 2%.
The Fed also commented on the weak recent data on the labor market, saying labor market activity was slowing down, but it has performed well over the past few months.
In any case, at the next meeting on June 12-13, the Fed is expected to raise interest rates by 25 basis points after not doing so yesterday. Or, the market has bet almost 100%, that we will see a rise next month, unless something really dramatic happens.

The ECB kept interest rates unchanged

The ECB kept the interest rate unchanged by continuing to maintain its position on a smooth exit from the monetary stimulus.
The bank has confirmed that it will continue to buyback 30 billion euros a month at least until the end of September.
The ECB continues to believe that the best moment to start raising interest rates will be after the potential end of the asset repurchase program.
The ECB's decision became a fact, a day after Draghi confessed to the IMF that there is some slowdown in the growth of the eurozone, but overall growth will continue in the future.
Now, the question everyone is asking is if Draghi's acknowledgment will lead to a change in the ECB's policy towards a smooth exit from the stimulus program.
Inflation in the euro area continues to be weak, expected to rise 1.3% in March, against previous expectations of 1.4%.

The dollar appreciated by more than 10,700% against this currency

The rates with which Venezuelan bolivar falls against the US dollar are dizzying. Only in the past month the US currency has appreciated 135% against the bolivar. Since the beginning of the year, the appreciation is 2 958% or more than 30 times.
If we expand, however, the time horizon of up to two years, things seem quite startling. The US dollar has risen by 10,768%. To realize the appreciation, we can only say that the popular amongst the bankers cryptocurrency bitcoin has risen by only 2 500% over the same period.
The problems for Venezuela are well known. The country is in one of the biggest crises in its history, and hyperinflation is a phenomenon lasting checked in by the intervention of the government of President Nicolas Maduro. The decision by the central bank to print money as much as it is needed greatly facilitates hyperinflation in the country.
Announced plans of the president earlier this month to restructure foreign debt, only added to the financial difficulties for the country and led to chaos in the capital Caracas.
The Bolivar was traded at 96.794 dollars by the end of last week after it started the week at 82.186 per dollar. For comparison, the officially announced dollar rate is 10 dollars.
The situation in Venezuela is so out of control that some converts to Maduro began to talk about something unthinkable until recently - the liberalization of market policies.

The Japanese bank is expected to reduce its inflation forecast

Japan's central bank is expected to lower its forecast for inflation, but to refrain from increasing its incentives this month. This would be a step back from the promise of Haruhiko Kuroda, the head of the Japanese central bank, to do what it takes to reach inflation targets.
A potential fall in inflation forecasts in Japan would be another blow to the central bank as well as for the yen. The latter is already experiencing the negative impact of these expectations, with USD/JPY rising to levels above 113.50 yen.
The meeting of the Japanese Central Bank will be held on 19-20 July, which is expected to keep the monetary institution unchanged. But what investors will follow is what the bank will say about the state of the Japanese economy as well as about inflation.
Otherwise, expectations are for the CCB to reduce its inflation forecast for this year, ending March 2018, and for the next year.

Draghi appreciated the euro

The euro has appreciated, and US bonds have fallen, as ECB chief Mario Draghi has hinted that inflationary deterrents are temporary. This was accepted by market participants as a serious hint of the forthcoming normalization of the ECB's interest rate policy.
Interest rates on 10-year bonds rose by 3.7 percentage points to 2.175 percent. Bonds on two-year bonds added 2.4 basis points to 1.377%, while 30-year-olds rose by 3.3 basis points to 2.731%.
Draghi said a series of factors delayed the inflationary process, but they are generally temporary and should not cause inflation to deviate from the medium-term.
Market participants, however, read in Draghi's comment a signal for normalizing interest and monetary policy. Monetary incentives in the euro area are scheduled to end in December. It is entirely possible that they will not be prolonged beyond that period.
Interest rates on European government bonds also increased. 10-year German bonds rose by 6.4 basis points to 0.311 percent, while 10-year French bonds rose by 7.7 basis points to 0.684 percent.